He said: "The UK is ranked as the best place in the world to invest in offshore wind projects. The decision by DONG underlines the fact that we are providing certainty for investors, resulting in a steady stream of private funding for renewable electricity projects and the creation of thousands of green jobs.

"We want an energy mix that is built on diverse, home-grown sources to make sure our supplies are clean and secure. Wind power is vital to this plan, with £14.5 billion invested since 2010 which is powering over 3 million more homes across the UK."

Burbo Bank Extension, which received development consent in September, will consist of 32 MHI Vestas Offshore Wind V164-8.0MW wind turbines with a total capacity of 258MW. The wind farm is expected to be commissioned in 2017.

Samuel Leupold, Executive Vice President in DONG Energy, said: "I am very pleased that with this final investment decision we can now begin the construction of Burbo Bank Extension which will supply green power to approximately 180,000 UK households. The construction and operation of this wind farm will support green growth and employment in the UK."

He added: "The decision to construct Burbo Bank Extension using an 8MW wind turbine is another significant step towards reducing cost of electricity on future projects."

Manufacturing in the UKMHI Vestas have confirmed that the turbine blades for will be manufactured in the UK at their new Isle of Wight production facility.

CEO Jens Tommerup said: "The Isle of Wight is a world class R&D centre for developing and testing blades. The blades for the V164-8.0 MW prototype were designed, manufactured and tested at the Isle of Wight facility so we have developed the unique skills and processes necessary to manufacture blades which makes it a good location to ramp up to serial production."

He added: "MHI Vestas Offshore Wind will become the first manufacturer with the capacity to serial produce blades for future offshore wind projects in the UK. Serial production of 80m blades for the Burbo Bank Extension project will commence on the Isle of Wight from as early as Q2 2015."

MHI Vestas Offshore Wind will utilise the production hall at Vestas' blades technology centre on the Isle of Wight from 1 January 2015 and will invest in upgrading the facility for serial production.The facility was opened in 2011 and was specifically designed to develop large blades for the latest wind turbines. The facility consists of two halls 170m long and 50m wide, one for testing and verification, and one for blade production, which will be leased by MHI Vestas Offshore Wind.